Wells v. Kone, Inc.
| Decision Date | 08 November 2019 |
| Docket Number | Case No. 5:19-cv-340-JMH |
| Parties | WELLS, et al., Plaintiff, v. KONE, INC., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Kentucky |
This matter is before the Court on the Defendants' notice of removal [DE 1] and the Plaintiffs' motion to remand. [DE 5]. On April 25, 2019, Plaintiffs Roger and Carolyn Wells filed this action in Fayette Circuit Court against KONE, Inc. ("KONE"), KONE Elevators & Escalators of Louisville, Craig Lewis, Tony Dunsmore, and other unknown parties. [DE 1-1 at 2]. Defendants filed a notice of removal to federal court, alleging in part that Kentucky residents Lewis and Dunsmore were fraudulently joined to escape federal jurisdiction. [DE 1]. The Plaintiffs filed a motion to remand the case back to Fayette Circuit Court. [DE 5]. KONE filed a response [DE 6] and the motion is now ripe for the Court's review.
Because the Plaintiffs have at least a colorable claim against the non-diverse individual Defendants, the Court must remand this case to Fayette Circuit Court for lack of subject-matter jurisdiction.
Plaintiffs filed this negligence action in Fayette Circuit Court to recover for injuries suffered when the couple fell down an escalator at Blue Grass Airport in Lexington, Kentucky. They charge that KONE, which had a contract to repair the escalator at issue, and the other Defendants named in the case failed to maintain and repair it. [DE 1-1 at 5]. They claim the lack of proper maintenance by KONE and its former employees led to a malfunction that caused the Plaintiffs to fall.
Plaintiffs Roger and Carolyn Wells are citizens of Perry County, Kentucky. [DE 1-1 at 3]. KONE is incorporated in Delaware and its principle place of business is in Illinois. [Id.]. Plaintiffs claim that "Kone Elevators & Escalators of Louisville" operates out of an office in Louisville, Kentucky, and that the two individual Defendants listed are Kentucky residents. [Id. at 3-4].
KONE filed a notice of removal in this Court on behalf of all Defendants. [DE 1]. The company alleged that the Louisville KONE entity is not an independent corporation, but a branch office of KONE's national corporation. [DE 1 at 2]. Second, KONE alleged that the Plaintiffs fraudulently joined the two individualDefendants in an effort to defeat diversity jurisdiction in federal court. [Id. at 2-3].
After KONE filed its notice of removal, this Court asked the Plaintiffs to respond to the fraudulent-joinder allegation. [See DE 4]. Plaintiffs then filed the motion to remand [DE 5] and the Defendants responded. [DE 6].
The primary claim in this case is for negligence under Kentucky tort law and negligence per se based on Kentucky building-safety statutes. As a cause of action consisting entirely of state-law tort claims, KONE may only achieve federal subject-matter jurisdiction by proving that each party is diverse from the Kentucky Plaintiffs.
A case filed in state court is removable only if it could have originally been brought in federal court. 28 U.S.C. § 1441(a) (); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005) ().
Pursuant to 28 U.S.C. § 1332, federal district courts have original jurisdiction over civil actions between citizens of different states where the amount-in-controversy exceeds $75,000.00, exclusive of interest and costs. 28 U.S.C. § 1332(a). The "statute has been interpreted to demand complete diversity, that is, that no party share citizenship with any opposing party." Caudill v. N. Am. Media Corp., 200 F.3d 914, 916 (6th Cir. 2000). The burden of establishing diversity jurisdiction is on the removing party. Coyne ex rel. Ohio v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999).
Plaintiffs admit they seek more than $75,000 in damages, thus meeting that element of diversity jurisdiction. [DE 5 at 3]. Next, the Court must address the claim that the individual defendants, Lewis and Dunsmore, were fraudulently joined to defeat diversity. The Plaintiffs argue that diversity does not exist because the two individually named defendants are Kentucky residents, are licensed to work on escalators in Kentucky, and did, at some point, work on escalators in Blue Grass Airport. [DE 5 at 4]. Dunsmore and Lewis worked in a maintenance capacity at the airport and are former employees of KONE. [See DE 6 at 5]. KONE argues that because Dunsmore and Lewis did not work at Blue Grass as mechanics close to the time of the incident, there is no reasonable basis for pleading them into the case. [DE 6 at 5].
Fraudulent joinder is an exception to the complete diversity requirement and applies when a non-diverse defendant was clearly named to avoid federal court. In re Darvocet, Darvon and Propoxphene Prod. Liab. Litig., 889 F.Supp.2d 931, 936 (E.D. Ky. 2012)(citing Coyne ex rel. Ohio v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999)). Plaintiffs may not join resident defendants in a state court case for the sole purpose of defeating federal diversity jurisdiction. Id. To prove what courts have doctrinally titled "fraudulent joinder," a removing party must present sufficient evidence that the plaintiff could not establish a cause of action against nondiverse defendants under state law. Salisbury v. Purdue Pharm., L.P., 166 F.Supp.2d 546, 549 (6th Cir. 1994)(citing Sprowls v. Oakwood Mobile Homes, Inc., 119 F.Supp. 2d 694, 695-96 (W.D. Ky. 2000)). If the claim against the non-diverse defendant has even a "glimmer of hope," there is no fraudulent joinder. Murriel-Don Coal Co., Inc. v. Aspen Ins. UK Ltd., 790 F.Supp.2d 590, 597 (E.D. Ky. 2011)(citing Hartley v. CSX Transp., Inc., 187 F.3d 422, 426 (4th Cir. 1999)). The plaintiff's actual motive is irrelevant to this inquiry, although the test works as a "proxy for establishing the plaintiff's fraudulent intent." In re Darvocet, 889 F.Supp.2d at 936-37 (quoting Smith v. SmithKline Beecham Corp., No. 11-56-ART, 2011 WL 2731262, at *5 (E.D. Ky. July 13, 2011)).
The removing party carries a heavy burden in pursuing a fraudulent joinder argument because the test requires federal courts to peruse the merits of a plaintiff's claim before knowing if it has jurisdiction to do so.1 Federal courts risk running afoul of their limited jurisdiction in making that decision. Thus, as the Sixth Circuit has recognized, the Court "must resolve all disputed questions of fact and ambiguities in the controlling ... state law in favor of the nonremoving party," and "[a]ll doubts as to the propriety of removal are resolved in favor of remand." In re Darvocet, 889 F.Supp.2d at 937 (quoting Coyne, 183 F.3d at 493)(internal quotation marks omitted). Although the Court may, where the complaint does not clearly answer the question, look to the pleadings under what would be close to a summary-judgmentstandard, it should be careful not to stray from the jurisdictional threshold question. Id.
In this case, the Plaintiffs allege general negligence and negligence per se under Kentucky tort law. Of course, the elements of negligence in Kentucky are as follows: a plaintiff must show that (1) the defendant owed the plaintiff a duty of care; (2) the defendant breached that duty of care; (3) a causal connection between the defendant's conduct and the plaintiffs damages; and (4) damages. Patton v. Bickford, 529 S.W.3d 432, 437 (Ky.App. 2001). Claims of negligence per se simply substitute Kentucky's common-law standard of care with a statutory standard of care. Estate of Moloney v. Becker, 398 S.W.3d 459 (Ky.Ct.App. 2013).
Additionally, Kentucky's pleading standard will apply in evaluating whether the Plaintiffs pleaded a colorable claim. See In re Darvocet, 889 F.Supp.2d at 940 (). Although Kentucky courts have moved in the direction of adopting the more stringent federal pleading requirements, they still apply a "notice pleading" standard, where the "central purpose of pleadings remains notice of claims and defenses." Pete v. Anderson, 413 S.W.3d 291, 301 (Ky. 2013)(quoting Hoke v. Cullinan, 914 S.W.2d 335, 339 (Ky. 1995)); see also Red Hed Oil, Inc., v. H.T. Hackney Co., 292 F.Supp.3d 764, 771 (E.D. Ky. 2017). In fact, Kentuckyemphasizes "substance over form and discovery over pleadings." V.S. v. Commonwealth, Cabinet for Human Res., 706 S.W.2d 420, 425-26 (Ky.Ct.App. 1986).
KONE notes that the Plaintiffs have not asserted any specific claims against Dunsmore and Lewis alone, but rather make claims against all Defendants. [DE 6 at 6]. The two individual Defendants do admit, however, that they worked on escalators as employees of KONE within five years of the accident.2 The Plaintiffs thus believe that there could be a reasonable basis for recovery against Dunsmore and Lewis in their individual capacities.
Although these allegations are not riddled with detail, sufficient notice has been given of a colorable claim by Plaintiffs against the individual D...
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